Green jobs stimulus will cost $135,000 each

posted at 1:36 pm on January 12, 2010 by Ed Morrissey

As part of his “hard pivot” towards jobs, Barack Obama announced last week a new program to stimulate “green jobs” with a $2.3 billion federal program. Mark Tapscott took a look at the particulars of the grants and checked with the Institute of Energy Research, which had already grabbed its calculator. The bill aims to create 17,000 jobs, mainly temporary, which means that we’ll spend over $135,000 per job in stimulus:

President Obama’s announcement earlier today of an additional $2.3 billion in federal tax credits for creating approximately 17,000 subsidized temporary jobs in the green energy industry is drawing a less than enthusiastic response from Thomas J. Pyle, president of the Institute for Energy Research:

“Show me one other industry that requests and receives a nearly 30 percent taxpayer subsidy. That’s what the wind and solar industries require – at a minimum – to exist. All the president did today is throw more money at an unproven technology that is not economically viable in the marketplace. Unfortunately, the only winners in this latest taxpayer giveaway will be Wall Street money managers and corporate interests in the wind and solar industry.

“If the president really wants to create an environment that will foster economic growth and job creation, he need not look any further than the domestic oil, gas and coal industries. These three industries and energy sources built this nation. For the administration to continue to ignore this fact and to keep the vast resources that taxpayers own under lock and key at the Department of Interior is irresponsible and a disservice to the American people.

“The Outer Continental Shelf (OCS), if opened for business, would create over 1 million high-wage jobs. It would reduce our dangerous dependence on hostile nations for their energy resources and spur economic growth across all 50 states. Development of these energy resources will create sustainable employment, not taxpayer dependent make-work jobs.”

To put this in perspective, the $2.3 billion would create less than 25% of the jobs that were lost in December alone — and only temporarily. Thus far, the economy has not had much problem in generating temporary work; it’s one of the few growth categories of 2009. Normally, that would be seen as a harbinger of job growth as businesses use temp workers to ramp up production, which then requires permanent workers to maintain. However, in this case it seems as though businesses have begun to rely on temp workers as a hedge against onerous new rules coming as part of ObamaCare, as well as to have more flexibility on staffing when new taxes start hitting the bottom line, mainly on energy costs with cap-and-trade proposals.

IER makes a good point, though, on American resources being ignored by the Obama administration. We have an abundant reserve of oil off of both coasts, and it wouldn’t take government money to create those jobs. Indeed, by expediting the leases off of the OCS, private industry would create hundreds of thousands of jobs, mainly high-paying union work, while shifting more of our oil demand onto domestic resources. That alone would bolster the dollar, which would have the effect of driving down energy costs in both real and exchange-rate terms — a boon for the economy at a moment when it desperately needs an invigorating impulse. In fact, the government would increase its revenues at both the federal and state levels by issuing the leases, rather than spending $135,000 per temporary job.

Why aren’t we doing that, if it’s such an economic no-brainer? The Obama administration doesn’t want to encourage the use of fossil fuels; that’s why Interior Secretary Ken Salazar make it more difficult to get leases last week, rather than easier. No-brainers require actual, working brains to recognize, apparently. (via QandO)

Update: Scott Lincicome says it’s an utter boodoggle, and there is plenty more wrong with it.

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So, if somebody wants to build a coal plant business, they can — it’s just that it will bankrupt them, because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted taxes we will impose.

The Congress in 2006 set all this in motion —On purpose –to stall our economy — in order to win the Presidential election in 2008 with the help of acorn and the unions and the global warming hoax they did it — to me it seems , Middle America is the target — they want to make us Serf’s …

No, they have working brains and they are doing exactly what they want. Obama said that he had no issue with $4 a gallon gas, he just wished it wouldn’t have happened so quickly. Now it’s hovering around $2.60 and it’s been going up methodically over the last few months.

So they know exactly what they are doing. They really want gas to get back to $4 a gallon or higher. And if green jobs were so profitable then why in the world does the government need to pay for them?

I don’t. I blame short-sighted visa policies and academia. The real jolt is that a lot of the college education is obtained here. Then the experience needed is gained in Europe. It’s like any complex technology, of course, where apprenticeship is half the game.

It seems to me like there is a “middle-ground” solution that would appeal to all sides of this issue.

Open up the OCS, open up the massive shale formations, open up ANWR, etc, to environmentally sound, domestically based energy production – this would have an absolutely incredibly positive impact on the economy, on the employement situation, to our standing in the world, etc. as noted by Mr.Tapscott and Mr. Morrissey in this posting.

AND THEN:

Take all the money earned from the leases, add a small percentage sur-tax to all money generated from the energy produced and designate it for research, feasibility studies and incentives for the use of non-carbon based energy INCLUDING ADVANCED NUCLEAR ENERGY!!

Our current problem is, that 100% “green” energy production simply is not yet ready to power this nation, although it likely will “have” to be at some point in our future. This plan allows us to produce energy domestically, gets us out from under foreign producers, reduces our trade imbalance, strengthens our currency, creates massive numbers of living-wage (high-paying) jobs, provides non-taxpayer funded money for research, development and desimination of future energy sources and on and on and on.

The advantages are so massive and so obvious that the American people should be rising up en masse and insisting the government get off its butt and put this type of plan into immediate action.

(I’ll accept a small consultant’s fee for solving this nation-wide problem of 1/10th of a percent of the monies generated by the increased production).

Well, I am a little relieved. I would have thought that this administration couldn’t have “created” a “job” for less than 7 figures.

The exasperating thing is that the so-called “educated class”, as the Beltway cockroaches likely consider themselves, doesn’t seem to grasp that any “stimulus” that doesn’t accelerate wealth generation enough to cover its cost through the concomitantly increased tax revenue actually destroys jobs.

Spain did this exercise already with overwhelming negative results. I know Paul Krugman would approve this kind of venture but that doesn’t flatter those who possess common economic sense. You don’t invest $1.30 for every $1.00 you might make later on unless you are a government run program. Stupid is as stupid does and this is stupid.

This is the rock that Obama was talking about earlier this past year in building his economic recovery. It, like all the rest of these destructive socialist policies, they are geared at spending money we don’t have and spreading it around to the people the government approves of, period.

I think the worst about this is that we’ll pretty much have to import all the labor, since Europe is far ahead in terms of education/training/etc.

We totally have blown it on this. We’re still talking about light bulbs, for gosh sakes.

I feel like Smokey the Bear is going to reappear any day.

AnninCA on January 12, 2010 at 1:44 PM

I don’t. I blame short-sighted visa policies and academia. The real jolt is that a lot of the college education is obtained here. Then the experience needed is gained in Europe. It’s like any complex technology, of course, where apprenticeship is half the game.

*arrrrrggggggghhhhh*!

AnninCA on January 12, 2010 at 1:56 PM

Ann,

American companies have been installing wind turbines and solar panels inside the US for dozens of years. The labor is here to do this now, if it were economically possible to make this stuff pay its own way to begin with. We have zero need to depend on Europe for any of this. Our engineers can install oil rigs and wind turbines with equal competence.

So called “Green Jobs” are nothing more than technology from the 1980s being used in government subsidized projects all over the country. My former employer installed 4 wind turbines at GITMO in the early 2000s, among many other sites. Two of my former employers installed hundreds of solar panel projects across the US. All of these projects showed that only when subsidies are provided by government do they become cost effective. The paybacks for them, with subsidies is out around 20 or 30 yrs. The paybacks for lights and variable speed machines is closer to 3-7 yrs. If it won’t pay back from energy savings in 3 yrs, most commercial companies can’t fund them. And no business is going to take out a 30 yr loan to make itself profitable in that period of time.

While many large manufacturers of wind turbines are foreign companies, US companies could easily come up with plenty of competition in a few years. The backlog for large wind turbines, however, is over 18 months before your order even begins to get built, such is the backlog. So any project utilizing wind and many solar panels is likely to take 3-5 yrs to reach construction anyway.

Bottom line: “Green Jobs” are totally useless “feel good” project oriented makework that save minimal energy and are unreliable in the extreme when completed, and are unable to become reliable energy sources all over the US to replace “fossil fuels”. If it could be done economically, then it would have already been done. When gasoline becomes much more expensive because it is truly scarce, only then will electric cars and solar energy and wind become useful. And by that time, civilization will be unable to sustain itself beyond the poverty level because it will be too expensive to buy an aspirin, much less worry about how to fuel your transportation.

You persist in believing in fantasies about clean energy coming from systems with no continuity of power, and clean emissions from some fantastic suspension of the Laws of Physics and Chemistry which insist that heat comes from chemical reactions in all fuels that then generate CO2 and Water as waste products. All energy consumption in the world today, except nuclear power and solar and wind energy come from this basic premise. And manufacturing solar panels and wind turbines requires energy from fossil fuels.

One estimate is that 500 nuclear power plants would make America energy independent. I think that is optimistic in that an abundance of electricity doesn’t mean we won’t need to import oil for transportation needs, but it would certainly take us a long way toward independence. The cost would be in the order of 2 billion per plant (I would think less; that is the first one might be 4 billion, but the 400th would be considerably less than a billion; but call it 2 billion). That is one trillion dollars, comparable to the TARP or stimulus — and for once a deficit would be financing something real.

It is less than the cost of the war, and less than the war is going to cost if we continue. Cheap reliable energy would be one major step toward economic recovery. Low cost energy plus freedom will bring prosperity. If we have the energy we can work on the freedom. The whole thing could be accomplished in four years. Of course the ravening wolves in the Congress won’t do it — but then it’s not likely that this is the kind of hope and change we can believe in from the current White House.

But it would work. France knows the value of nuclear power. Why can’t we learn it?

To think the ‘stimulus’ could have actually made a difference in our energy generation, put us on a path towards long term oil import reduction, established a sizeable distributed nuclear power network using safe Gen 3 and 4 designs, and removed a major pollutant source from our economy. Too bad that isn’t considered ‘Green’, huh?

Smart, yes. Wise, yes. Green, no.

So how come the geniuses in the Obama Administration, ‘the smartest guys in the room’ couldn’t figure this out? Was it a room full of toddlers when the smartness was measured?

Remember every couple of billion handed out in political cronyism, graft, corruption… each and every $2billion is one nuclear plant. When you hear of billions in pork, remember this.

Oh, and your electricity bill would go down, too. We have safe and secure resources for nuclear plant materials right here in the US. And it might even spur on vitreous encapsulation of low level radioactive waste if we don’t have good secondary processing facilities for it… both of which would help to blunt or eliminate the environmental impact of nuclear waste. But that would be smart, too. Not Green, but Smart.

As a job creator, there’s also the elephant in the room nobody talks about: SHALE OIL under the Rockies. A 2005 Rand report estimates between 0.5 and 1.1 TRILLION barrels of recoverable shale oil in western Colorado, eastern Utah, and southern Wyoming.

If we import about 14 million barrels a day, that works out to about 5 billion barrels a year–even the low-end estimate would represent 100 years’ worth of US oil imports. Develop this resource, and the US could tell every hostile oil-exporting country to go fly a kite because WE DON’T NEED THEIR OIL !

According to the RAND report, the shale oil could be extracted in an environmentally-friendly way (in-situ heating) for about $30 to $40 per barrel. Allow $10/barrel profit for the oil companies, and American oil would be underselling foreign oil, and foreign producers would have to LOWER THEIR PRICES to compete with US !

Plus, if oil companies invest $30/barrel x 5 billion barrels per year = $150 billion/year, how many jobs can THAT create, with NONE of the money from the taxpayers?

Admittedly, it would take about 20 years to develop this resource on a commercial scale, but the best way to have a forest in 20 years is to plant trees NOW. If the land were opened to development, the jobs would start NOW, we put everyone on welfare to work in the Rockies, and the oil would flow later. But for NOW, Interior Secretary Ken Salazar, former Senator from Colorado, hath decreed “thou shalt not seek shale oil under my Rockies”, and jobs go begging, and the shale oil sits there waiting…for what?

We have an abundant reserve of oil off of both coasts, and it wouldn’t take government money to create those jobs. Indeed, by expediting the leases off of the OCS, private industry would create hundreds of thousands of jobs, mainly high-paying union work, while shifting more of our oil demand onto domestic resources.

Welcome to the party. Those aren’t our only oil reserves. Shale oil reserves promise years of additional fuel, and it’s easier than ever to get. And the natural gas industry is experiencing a lot of growth in America. Opening up Federal lands to developoment would create new revenue for Uncle Sam and for the states where the resources are.

But that would reduce reliance on government handouts, so it’s a non-starter for President B.O.

If the land were opened to development, the jobs would start NOW, we put everyone on welfare to work in the

Rockies, and the oil would flow later. But for NOW, Interior Secretary Ken Salazar, former Senator from Colorado, hath decreed “thou shalt not seek shale oil under my Rockies”, and jobs go begging, and the shale oil sits there waiting…for what?

Smart power…my @$$

Steve Z on January 12, 2010 at 3:17 PM

Any family or company that needed money would lease those resources in order to raise funds. Uncle Sam prefers to beg China for money, and crank up the printing presses, while keeping its citizens reliant on government aid.

I am in the green job solar industry (for two different companies over the years) and their business motto is “design for China or India”. Cheap labor and these Countries are already geared up for production. Plus the fact that a tremendous amount of energy is needed to produce the materials for solar panels, energy is far cheaper in these Countries as long as they don’t sign up to Cap and Tax.
Solar panels are cool but I can’t see an American economic future in it. A watt produced here is a watt that we don’t have to import through fossil fuels but unfortunately we bleed money out of this country through foreign labor. It’s a wash.
You want to have real energy that keeps money from bleeding out of this Country, nuclear and hydro. You want to gain the wealth in this country, you need something that can be exported. We don’t have anything that can compete on the energy market. Labor is too high and the Government will tax us to death. The best we can do is stop the bleeding and look for some other area to increase the wealth. No real sustaining jobs in energy.